With the recent FATF report
and consequent guidelines, we are witnessing the door closing on anonymity, requiring steps to ensure decentralized, open source projects survive.

Privacy

Permission blockchain

Zero public scrutiny

Privacy

70% Complete

Forensic Protection

70% Complete

P2P/AML/CTF Enabled Compliance

70% Complete

Public blockchain

Traceable anonymous addresses

Privacy with effort

70% Complete

Publically available

70% Complete

AML/CTF Compliant

70% Complete

Identabit's Purpose

We are driven by a desire to see decentralized technologies disrupt and disintermediate. We believe the fight to see
Bitcoin accepted by regulators is lost and is undermining the possibility of seeing a neutral global currency gain acceptance.

In essence, we see it as naive to believe that governments can tacitly ignore the issues associated with anonymous
cross border transactions and if a decentralized alternative is not deployed, we will see banks and centralized
operators seize the spotlight and suppress the potential of decentralized technologies.

For Society

Identity based transactions are intended to make theft and extortion illogical, given a thief must pass proceeds to an
identified party. All aspects of anonymous crime by definition should be and will be contained by enforcing identity. As
a consequence society and our children are protected from exploitation and criminal abuse.

For Institutions

If we put aside the moral issues of empowering crime, how can we ignore a bank's responsibility to report suspicious
transactions. How can institutions recognize an anonymous neutral currency when to do so would mean they potentially break
the law? Identabit enables institutional support.

For Developers

Identabit is an open source, genuine solution to the legitimising of decentralized technologies, enabling developers
to focus on sustainable business opportunities that ultimately disrupt and disintermediate the unnecessary and inefficient.

For Users

To drive adoption digital money must improve on both cash and credit cards. For this to happen, digital money must pass
rapidly and easily, between participants. Value must be exchanged without fear of transfer inaccuracy and users must be
able to expand their network of recipients with the same address-book leverage and simplicity experienced with mobile messaging.

For Regulators

AML/CTF compliance by exchanges and banks is meaningless unless inclusive of P2P transactions. Identabit enables P2P/AML/CTF
by way of blockchain enforced identification and transaction privacy.

Decentralized Governance

The Identabit Challenge

The Objective: to design a financial blockchain that recognises the importance of institutional adoption, eliminates the need for interbank
settlements and brings costless multi-currency transfers to all those that need it most.

Identabit began with a set of requirements that were considered by the crypto-community both impossible and undesirable as they faced
insurmountable technical obstacles and conflicted with the ideology of anonymity. Below are many of the challenges addressed through persistence and innovation.

The Objectives and The Difficulties

Transaction Identification

The Difficulty: Difficult because user data must be consistently captured by a mechanism that satisfies regulatory reporting and limits an institution's exposure to possible violations of
jurisdictional rules and regulations by its customers.

Unbanked Support

The Objective: The Identabit network must enable registration and use by the unbanked. The process must be markedly simpler for the unbanked than the process to obtain and use Bitcoin.

The Difficulty: Difficult because this requirement appears to be in conflict with the requirement to adequately identify all users on the network and might lead to high friction.

Blockchain Auditability

The Objective: Proof of Reserve, a feature to allow users and stakeholders to independently verify their blockchain holdings, must be available for audit at any time.

The Difficulty: Difficult because, in contrast with Bitcoin's public ledger where all transactions are visible, Identabit transactions and the identity of participants are obfuscated.

Identity & Privacy

The Objective: Unlike Bitcoin, where the user's wallet address is public, Identabit protects a user's privacy where neither the wallet address nor the user's identity are available for public scrutiny.

The Difficulty: Difficult because whilst it's simple to obfuscate, it results in data being potentially unavailable for verification and or regulatory inspection.

Transaction Privacy

The Objective: Unlike Bitcoin, where transaction values are public , Identabit protects a user's financial-footprint™ from public scrutiny, by preventing
forensic analysis and protecting users from unwarranted private or government inspection.

The Difficulty: Difficult because while a user's privacy is paramount, it is necessary to enable transaction verification and regulatory compliance.

Theft Prevention

The Objective: Unlike Bitcoin, integral measures should be available in order to prevent theft.

The Difficulty: Difficult to achieve given the ease by which hacked/stolen proceeds can be moved to peer to peer.

The Difficulty: Difficult because some legislators are imposing regulations on central points of administration, risking a currency's neutrality.
Consequently oversight of the Identabit blockchain must remain free of unilateral action and individual responsibilities.

Regulatory Compliance

The Objective: Based on transaction behaviour, regulators require access to user data determined by a jurisdiction's regulations.

The Difficulty: Difficult because regulatory access must reflect the specific legal conditions of a jurisdiction and access to a user's data
must be limited to warranted demands and must not leave the blockchain open to unwarranted inspection.

Institutional Integration

The Objective: To enable adoption, unlike Bitcoin Idenabit must enable institutions to trade without concern for regulatory violations.

The Difficulty: Counterparty identification is essential to meet regulatory demands

Settlement Elimination

The Objective: To enable P2P transactions, eliminate interbank settlements and enable support for multiple digital currencies.

The Difficulty: The network must accommodate a zero risk, multi-currency facility, and any changes to the institution's
transaction process must respect existing business models in order to gain acceptance.

Simplified registration

The Objective: Users should be able to register with the simplicity that they experience when they join existing mobile and social networks.

The Difficulty: Difficult because a registration process that requires a verified identity may also require the submission
of extensive personal information, which may result in rejection by the majority of potential users.

Accuracy of transfer

The Objective: Unlike Bitcoin, users should be confident that they are sending value to a known party, rather than
risking mistakes in transposing a wallet address or a receiver's handle.

The Difficulty: Difficult because senders are typically responsible for accurate recording of the receiving party.

Simplified send

The Objective: Users, as with Bitcoin, should be able to immediately send funds to any potential participant.

The Difficulty: Difficult because users are limited to varying transaction thresholds and there can be no surety in advance that the receiver is verified to receive the amount sent.

Reversible transactions

The Objective: Unlike Bitcoin, it is essential that a transaction that cannot be retrieved by the receiving party, can be reversed and returned to the sender.

Transaction scalability

The Objective: Unlike Bitcoin, it is essential that the network can scale to transaction speeds and capacity that exceed those of Visa and Mastercard
(published speeds of 24,000 TPS (Transactions Per Second).

The Difficulty: Difficult if using Bitcoin's Proof of Work which is currently limited to 7 TPS.

Sustainable Funding

The Objective: Like Bitcoin, it is essential that the network continues to release value to compensate network block validation and other
work on behalf of the blockchain. But, unlike Bitcoin, the continual release must serve market makers, facilitate continual development, have suitable
oversight and must not do so at the expense of the market value of the traded asset.

The Difficulty: Difficult because, unlike Bitcoin, continued release requires algorithmic control of issued funds which must be distributed in
accordance with verifiable budgets, determined by way of consensus governance recorded on the blockchain.

Jurisdictional Compliance

Fincen Compliant 100%

100% Complete

License, eg. Bitlicense 100%

100% Complete

Strasbourg Convention 100%

100% Complete

AML/CTF 100%

100% Complete

By Citizen 100%

100% Complete

By Organization 100%

100% Complete

Unregulated Gateways 0%

0% Complete

Fincen Compliant 0%

0% Complete

License 0%

0% Complete

Strasbourg Convention 0%

0% Complete

AML/CTF 0%

0% Complete

By Citizen 0%

100% Complete

By Organization 100%

0% Complete

Unregulated Gateways 80%

80% Complete

Blockchain Compliance

Regulatory compliance rests with those organizations responsible for the customers connectivity. As a consequence they must implement jurisdictional-specific Risk & Compliance processes and they must make records available for appropriate audit. It is therefore essential that the organization responsible for reporting, be the organization familiar with the rules of data collection and reporting specific to the jurisdiction.

Licenses

In addition, to be compliant any organization enabling or administering transactions on a blockchain must, where licenses apply, be licensed as a money transmitter.

Variables

Considering the variety of national, regional and local conditions, it is very difficult, if not impossible, for a single organization to satisfy the compliance conditions for every market.

Gateway Veracity

Once this conclusion is reached, it becomes obvious that the veracity of the gateway is critical to the integrity of the network, therefore the network must protect itself from unregulated participants.

Organizations

Compliance goes beyond individuals, businesses and organizations must also submit their records for KYC verification. Once again the local rules and the registration standards regarding an organization's credentials must be observed in order to claim regulatory compliance. Support must be in place for the myriad types of organization which exist in each jurisdiction.

International Treaties

Finally there is the AML/CTF Act itself. The requirements for Suspicious Activity Reports (SARs) differ widely. Seizure rules may or may not apply, e.g. Strasbourg Conventions 1990-2005 (on laundering, search, seizure and confiscation of the proceeds of crime). How do local regulators support the use of a risk based approach to AML? How do they deal with Politically Exposed Persons (‘PEPs’)? Are there restrictions on doing business with shell banks? These are all regulations that require local observation and enforcement in order to claim AML/CTF compliance.

Institutions

In essence, compliance is demanding and complex. Those most capable of implementing robust compliance are well established. It is these established institutions that are essential for the adoption of and compliance with, regulatory requirements. Therefore, any digital ledger/currency solution must work closely with globally distributed and established institutions in order to provide appropriate compliance in local jurisdictions.

FATF

Compliance is country specific, requiring careful inspection of the local licenses and regulations required by the various government entities addressing financial transactions. As a consequence there is no agency specific to money laundering or terrorism but rather guidelines published by the Financial Action Task Force (FATF). These guidelines are intended to influence, country by country and often state by state, specific regulations.

BSA Four Pillars

In the US, the Patriot Act (Section 352) requires institutions to establish an AML program, the minimum requirements of which are commonly referred to as the "four pillars".

Designation of a Compliance Officer

Development of internal policies, procedures and controls

Ongoing, relevant training of employees

Independent Testing and Review

Local Adherence

For example, to be regulatory compliant in New York State an organization administering transactions via a website visited by New York residents, must not only have a Fincen money transmitters license but also a NYDFS (New York State Department of Financial Services) Bitlicense, as well as satisfying licensing requirements as required by other financial regulatory bodies.

Identabit Compliance

We recognize that no single organization can claim compliance across all states, countries and government departments. As a consequence and out of respect for the issues, we have chosen to enable compliance by working with local institutions, exchanges and gateways to ensure participants are regulated and their customers are identified. This approach enables us to make and defend our claim to be a blockchain enabling a decentralized regulatory compliant currency".

Accuracy of Transfer

Receiving details are verifiable

70% Complete

Identabit users are matched

70% Complete

Receiving details are not verifiable

70% Complete

Bitcoin users are anonymous

70% Complete

The Identabit Manifesto

We are passionate about open source and welcome all those interested in furthering the integration of decentralized
technologies into existing frameworks and remain convinced that disruption succeeds from within.

Pro-privacy

Transaction and privacy comes as a consequence of Identabit's blockchain being closed to public and regulatory scrutiny.
Conditional P2P/AML/CTF reporting is the responsibility of an exchange therefore limiting transaction visibility to users
and their specific exchange.

Pro-protection

The introduction of identity not only minimises the threat of theft but also reduces the risk profile for
storing of customer funds, reducing the cost of insurance and increasing the protection of customer assets.

Pro-P2P/AML/CTF

Identabit’s architecture pays due respect to the intent of AML/CTF reporting and recognizes that for it to be effective, Suspicious Activity Reports (SARs) must be inclusive of P2P transactions throughout the network resulting in P2P/AML/CTF reporting.

Pro-institutions

By respecting the need for P2P/AML/CTF reporting inclusive of counterparty identification, Identabit offers banks a unique
opportunity to embrace a neutral digital currency that does not ignore the legal obligations inherent in regulatory compliance.

Pro-governance

All aspects of Identabit Governing Councils have inherent checks and balances preventing unilateral action and/or facilitating
routing of budgetary expenditure and council recommendations, to ensure integrity by way of transparent governance.

Pro-government

An identity based chain by way of exchanges, enables auditing of an account holder's transactions, where taxation
requirements demand. Whilst at the same time P2P/AML/CTF reporting ensures currency controls are respected.

Pro-sustainable funding

Identabit's sustainable funding mechanism, uses Identabit's unique Proof of Appreciation to ensure that
funding, by way of dilution, occurs only when algorithmically permitted.

Pro-market makers

Proof of Appreciation results in semi-annual auctions allowing Market Makers to bid and acquire
significant holdings at an effective discount to support market positions.

Pro-open source

Identabit is a derivative of existing blockchain architecture and, as such, is open source.
Solutions that further the advancement of identity will continue to be shared with the community.

Pro-existing infrastructure

Existing investments in Bitcoin exchanges and payment platforms can readily transition business
to a sustainable compelling opportunity that removes the reliance on Bitcoin's increasingly, evasive potential.

Pro-FX professionals

Unlike the stigma and uncertainty preventing top-shelf market makers from adopting anonymous currencies, Identabit enables institutions to comply with the regulatory demands local to their jurisdiction.
Enabling early adopters to take a commanding position in a currency strategically designed to dominate the global, neutral currency market.

Pro-adoption

By combining institutional support, government respect, regulatory compliance and enhancement with ease of use,
Identabit removes adoption barriers inherent in anonymous based currencies.

Pro-efficiency

Identabit's DPoS reliant transaction validation is hundreds of times more efficient than Bitcoin's Proof of
Work due to the absence of unnecessary complex currency generation.

Pro-speed & capacity

Utilizing advanced Proof of Stake architecture, block confirmation times results in sub 3 second transaction
times and when combined with transactional capacity equal to that of Visa and Mastercard, Identabit competes with
fee charging credit card networks and satisfy the speed required for cash, replacing cross counter digital transactions.

Efficiency

Relative compute/power consumption 0.5%

70% Complete

Comparable block confirmation time < 3 seconds

70% Complete

Current relative transaction capacity scalable to 100,000 tps

70% Complete

Relative compute/power consumption 100%

70% Complete

Comparable block confirmation 600 > seconds

70% Complete

Current relative transaction capacity limited to 7 tps

70% Complete

The Identabit Principle

Private Blockchain

Driving Identabit is the principle that identified transactions on the blockchain should not be visible
to public or government scrutiny.

Private Transactions

Driving Identabit is the principle that financial transactions should be private from public and
regulatory scrutiny unless they are identified as suspicious by a regulated body

Genuine Compliance

Driving Identabit is the principle that AML/CTF must be extended to P2P transactions occurring on the blockchain

Open Source

Driving Identabit is the principle that open source decentralized technologies must be unleashed and allowed to
realise their full potential and not held back by ideology.

The Enemy Within

Anonymity Undermines

Driving Identabit is the core belief that anonymity undermines the adoption of digital currencies, due to regulatory
conflict, complex UX and the diversion of creative development towards an unrealisable and undesirable objective.

Banks Love Anonymity

Driving Identabit is the core belief that big banks relish the ongoing adoption conflict arising from anonymity, the
growing stigma of illegality and most of all they appreciate the time it buys them to present bank driven alternatives.

Anonymity Empowers

Driving Identabit is a core belief that anonymity empowers extortion as well as enabling theft and other illicit transactions
that are counter to the public's interest and that regulations designed to identify suspicious transactions are valid and should be respected.

Recognition

Account Holder Rights

Whilst Identabit emphasises the importance of protecting society from extortion, theft, money laundering and financing of terrorism,
their is equal concern regarding the relaxed attitude of institutions supporting unwarranted government breaches of personal data. As with all members, institutions violating customer trust, risk delisting by their respective council.

Children First

Identabit recognises that it considers the protection of society from anonymously empowered crime to be more important than the continuing threat of government tyranny and as a consequence we make no excuses.
If we must choose between child exploitation and tyranny,a child's safety will and always should be the priority of the Identabit Principle.

Issuance Efficiency

Entire issuance at the genesis

Managed by: Proof of Appreciation (PoA)

Issuance dependant on market conditions

Block confirmation < 5 seconds scalable

70% Complete

CPU/Energy typical computer power writing records

70% Complete

Issuance compute power

70% Complete

Progressive issuance

Managed by: Proof of Work (PoW)

Issuance independent of market conditions

Block confirmation 600+ mins seconds rigid

70% Complete

CPU/Energy excessive, mining farms, expensive

70% Complete

Issuance compute power >>> increasing

70% Complete

decentralized Autonomous Councils

Identabit councils are responsible for transparent governance and influencing outcomes, specific to their area of responsibility.

Finance Council

Responsible for the transparent disbursement of budgeted funds

Development Council

Responsible for recommending software development and release procedures

Delegate Council

Responsible for appraising delegates that can build confidence in the network.

Compensation Council

Responsible for recommendation regarding delegate compensation

UX Council

Responsible for continual improvement in the useability of Identabit applications

Marketing Council

Responsible for building awareness and credibility.

Legal Council

Responsible for legal liaison

Foundation Council

A council consisting of voting members and stakeholders

Sustainability

Asset Distribution

Total Assets:

50,000,000

Originators

5%

2,500,000

70% Complete

Existing community

25%

70% Complete

Strategic Partners

20%

70% Complete

Progressive Release

50%

25,000,000

70% Complete

Operations Allocation

Approx. Node net income

25,000,000

Further Costs

0

Operational Fund

22,500,000

Asset Distribution

Total Assets:

21,000,000

Originator

5%

1,050,000

70% Complete

Existing community

62%

70% Complete

Strategic Partners

0%

70% Complete

Progressive Release

33%

7,000,000

70% Complete

Operations Allocation

Approx. Node net income

700,000

Mining Equip.

6,300,000

Operational Fund

0

Transparent Issuance

Requirement

Asset release should be under the control of transparent code and show respect for market conditions

Initial issuance must have regard for sustainable funding and appropriate motivation

Solution

Reflecting Bitcoin's gradual introduction of funds but without the heavy cost of energy draining mining,
Identabit introduces Proof of Appreciation.

Proof of Appreciation enables sale by auction from a pool of funds determined at the genesis, for
sustainable funding of operational councils, eg. development and legal.

Proof of Appreciation auctions are semi-annual and determined by a transparent algorithm, where
availability of assets for sale is dependent on sufficient appreciation.

Auctions are designed to enable market makers to secure meaningful parcels of coins and importantly,
provide sustainable funding for the ongoing development and related operational tasks.

Budgets

Operating budgets are submitted by governing councils and passed by the Foundation Council and its members

Veto

Checks and balances achieved through transparent routing by way of automated multisig acceptance, unless
interrupted by a council veto.

Proceeds

Income from auctions is directed automatically to operational wallets in accordance with recognised budgets.

Transparency

All operational wallets are transparent to the community, where funds and associated expenditure can be
observed and commented on.

Summary

Proof of Appreciation and associated auctions are transparent and algorithmic. As a consequence have the security
of mining without the limitations of unconditional release of assets into a declining market

Transparency

Stated Direction and Governance 100%

70% Complete

Transparent governance 100%

70% Complete

Ongoing issuance allocated to sustainable 100% funding

70% Complete

Qualified decentralized institutional delegates 80%

70% Complete

Incoherent Direction absent of Governance 10%

70% Complete

Opaque administration 20%

70% Complete

Ongoing issuance allocated to miners, 0% funding

70% Complete

Random self serving mining pools 50%

70% Complete

Protection

Vulnerability to theft (low)

70% Complete

Insurance risk profile (low)

70% Complete

Vulnerability to theft (high)

70% Complete

Insurance risk profile (high)

70% Complete

Identabit Resources

We are software professionals intent upon building a superior network of software hubs with skills relevant to decentralized technologies.